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Analysis of Recent Changes to Thai Immigration Policy

Transcript of the above video:

As the title of this video suggests, we are going to be generally discussing Thai immigration policy. The reason I wanted to do this is there are multiple videos on this channel where I discuss how, basically since 2014-2015, the immigration apparatus has become increasingly strict with respect to application and enforcement of Thai Immigration rules, regulations and laws and has also at the same time, in certain ways created new visa categories which are sort of, for lack of a better term, easier to deal with, but I would actually argue maybe easy isn’t the right word, they are just a bit more straightforward.

So just to sort of set the frame for this video, there is a recent article, it was published in asia.nikkei.com, title is: Thai Government Snipping Red Tape from Foreign Business Visas

and the title is a little bit misleading to this as you will see shortly; it actually kind of more discusses how currently the system is rather difficult to deal with. Byline: Bangkok. Quoting directly, “Foreign Chambers of Commerce in Bangkok are feeling the pain of Apple, the US Tech Company, as it gropes through Thailand’s arcane bureaucracy in an effort to open its first Flagship store in the capital. Apple’s fate is a test for the military government which last month promulgated the National Competitive Enhancement Act for targeted industries. It wants to attract foreign investment in 10 existing and emerging high tech industries that involve significant research and development. These include bio-technology, robotics, digital and smart devices and logistics.” We have discussed this in more length in other videos specifically ones pertaining to the Easters Economic Corridor as well as the video discussing Thailand 4.0 initiative. Quoting further: “The new carrots on offer include a limited number of "smart” visas for foreign experts needed for the Thailand 4.0 initiative.” Quoting further: "The process for foreign work visas and for foreign businesses to operate needs to be simplified," said Kobsak Pootrakul, a Minister attached to the Prime Minister's Office, at a seminar for foreign and Thai businessmen in April. He said the issue would be raised in May with the 11 government agencies involved in approving foreign work visas.” Finally quoting further, “There nevertheless remain significant obstacles to hiring foreign workers. Thai-owned companies and Thai-foreign joint ventures that do not have Board of Investment privileges must have two million baht (over $60,000) in paid-up capital for every foreign hire, and there need to be at least four local hires alongside. Apart from U.S. citizens with Treaty privileges, foreigners may also not own more than 49% of a company in Thailand.”

So let’s unpack some of that. We discussed at length in many different videos on this channel, BOI companies, so called Board of Investment promoted companies. They can receive certain special benefits in the Kingdom. Things like foreign business licenses, special dispensations with respect to the number of work permits they can have etc, etc. Moreover, it also goes into discussing Treaty privileges. There they are talking about what is called the US-Thai Treaty of Amity, an economic cooperation. That treaty provides American citizens with the ability to own their companies nearly outright here in the Kingdom, notwithstanding the fact that all Thai companies must have 3 Thai shareholders. An American citizen can own virtually all the shares of the Company notwithstanding the provisions of the so called Foreign Business Act. So these are substantially beneficial things. But for those who cannot, use those, those that cannot avail themselves of those, the Foreign Business Act requires that certain businesses only be allowed to have a minority stake be allotted to foreign nationals. Moreover work permits: you have to have, as they noted there, Bt2 million baht in registered capital for each work permit and visa associated with the company. In the past, this has been a rather, I won’t say arcane, but it is not the most straightforward system for maintaining visa status, and in fact, it is my opinion that in recent years the immigration apparatus has tightened up on their protocols and actually made the process a bit more difficult. That being said the immigration authorities have created things like the Smart Visa initiative; they have instituted BOI protocols within that initiative, the Thailand 4.0 initiative in the Eastern Economic Corridor. In total what does this mean? Well what I think it means is that large foreign direct investors here in the Kingdom are going to see substantial benefits and we'll probably see ease of processing with respect to certain Thai visa and Thai work permit regulations. However those that do not seek protection unless things like the Board of Investment scheme or the Treaty of Amity are going to have a rather difficult time of it as I think that the system is going to get ever tighter. I think that the enforcement mechanisms here are going to become more stringent as time goes on and I simply think that making the assumption that Thailand's immigration apparatus is going to look like it did 5 years ago, 15 years in the future is foolhardy. I actually think Thailand’s immigration apparatus is going to start looking more and more like say Japan, Hong Kong or South Korea; it may even start looking more and more like its Western counterparts. You know quite honestly, there is something of an influx of foreign labor trying to get into Thailand and the Thai immigration system, I think is taking it upon themselves to go ahead and at the very least vet those new entrants, those new arrivals; in some cases turn them away. As is noted in another video on this channel, we discuss how it is increasingly common to see immigration officials simply deny applications for extensions based on documentation deficiencies and tell people to leave the country and reapply for a new visa and come back in, seek another extension. That was not unheard of in the past but it was not particularly common in the past. More and more we see it happening with a frequency bordering on commonality at the time of this video. I think that that trend is set. I think that the die is cast and we are going to be seeing that being more of the case in the future.

So the thing to take away from this video is I think immigration policy is becoming a little bit more relaxed with respect to large foreign direct investors here in the Kingdom but I think with respect to small entities, especially ones that can’t avail themselves of the protections under the BOI or the Treaty, It is safe to say that things are going to get maybe not more difficult but certainly more complex moving forward.